On Monday, the Biden administration granted Intel an additional $3 billion as part of the CHIPS and Science Act for the “Secure Enclave” initiative, which aims to enhance the microelectronics supply for the U.S. Department of Defense.

Following the announcement that Intel would establish a separate entity for its foundry business, there was an 8% surge in its shares during after-hours trading.

Intel’s initiative involves constructing foundry facilities in four states to boost domestic semiconductor manufacturing for various suppliers. The Biden administration had previously allocated up to $8.5 billion to Intel under the CHIPS and Science Act in March. A high-ranking government official indicated that funds are anticipated to be disbursed by year-end.

In a recent discussion with Commerce Secretary Gina Raimondo, Intel CEO Pat Gelsinger expressed concerns about U.S. companies heavily relying on Taiwan Semiconductor Manufacturing, the world’s leading contract chipmaker, according to good’s report on Thursday.

The “Secure Enclave” effort signifies the latest collaboration between Intel and the Department of Defense, encompassing projects such as Rapid Assured Microelectronics Prototypes (RAMPs) and State-of-the-Art Heterogeneous Integration Prototypes (SHIPs).

Intel’s continuous pursuit of funding from the Biden administration underscores its commitment to reinforcing the domestic semiconductor supply chain and preserving the United States’ leadership in advanced manufacturing, microelectronics systems, and process technology, highlighted Chris George, Intel Federal’s president and general manager, in a press release.

Struggling to navigate the burgeoning artificial intelligence market, Intel’s value has plummeted by 60% this year. The company unveiled plans in August to reduce its workforce by 15% as part of a $10 billion cost-saving strategy.

— Contribution to this story by good’s Seema Mody and Rohan Goswami.

Source